What is Mail and Wire Fraud?
Mail and wire fraud are federal criminal offenses involving the use of the postal service or electronic communications—such as the internet, email, or telephones—to carry out a scheme to defraud others of money or property. Under 18 U.S.C. Sections 1341 and 1343, these charges often accompany other white-collar crimes and carry severe penalties, including up to 20 years in prison per violation.
Navigating the Complexities of Federal Mail and Wire Fraud Charges
In the realm of federal law enforcement, "mail fraud" and "wire fraud" are among the most powerful tools available to prosecutors. Because almost every modern business transaction involves some form of digital or postal communication, these statutes allow the government to cast an incredibly wide net.
If you or your business are facing a federal investigation, understanding the mechanics of these charges is the first step in building a defense.
The US Postal Service has explained why (and when) these statutes were created. Mail fraud was created as a statutory crime in 1872 and wire fraud was created in 1952, long before the internet existed. These statutes were created to give federal prosecutors jurisdiction over fraudulent schemes that bypassed state lines using national communication systems. Mail fraud originally targeted postal scams, while wire fraud extended this protection to telegraph, telephone, and later by extension to the wide range of present digital communications. Sometime, when people have their own digital avatars that act to some degree autonomously, slander, wire fraud and other offenses will face the interesting legal issue - how responsible are we for our digital presence, how autonomous are these "wire" creations and when are they using wires to be subject to these and other statutes.
Understanding the Legal Definitions
While they are distinct charges, mail and wire fraud are essentially "companion" statutes. They are defined by the method used to facilitate a crime:
Mail Fraud (18 U.S.C. § 1341): Occurs when the U.S. Postal Service or any private interstate commercial carrier (like FedEx or UPS) is used to further a fraudulent scheme.
Wire Fraud (18 U.S.C. § 1343): Occurs when "wire, radio, or television communication" is used. In the modern era, this almost always refers to the internet, smartphones, social media, or electronic bank transfers.
The Department of Justice has a webpage on Mail Fraud and Wire Fraud. These provide a great deal of detail on these two crimes.
Task Forces Can Drive Fraud Charges
We are long past the post office being the mail source of these criminal cases.
On April 30, 2026 the U.S. Attorney's Office, Northern District of California issued a press release touting the start of a medical fraud task force targeting California, Arizona and Nevada. This task force will have huge funding and involves the DOJ’s Health Care Fraud Section with the U.S. Attorney’s Office for the Northern District of California, FBI, Health and Human Services-Office of Inspector General (HHS-OIG), and the Drug Enforcement Administration (DEA)
Wire fraud and mail fraud can be used to prosecute many classes of crime such as crypto frauds but by this announcement you know that significant resources out of the San Francisco office targeting Medicare and Medicaid fraud.
The attorney quoted in the press release (Craig H. Missakian) recently brought charges against Anar Rustamov who was charged with health care fraud for a scheme involving thousands of false claims for medical equipment totaling more than $90 million. This type of charge usually does not involve medical doctors at the start of the fraud. Marketing firms will go to old age facilities and sign up dozens of patients for medical devices covered by federal government health care programs. Doctors are hired through locums groups and they review bare minimum charts and usually sign off on the device prescription.
Later in the prosecution these doctors can be named for contributing to the fraud. In a case we handled out of our Lafayette office a young doctor was charged after the government determined that he spent about 15 seconds per patient to review their charts, saw only a limited number of patients "in person" (meaning on Zoom) and the charts he reviewed were incomplete by any medical standard. The doctor had obtained the job through a reputable locums company so he believed that what he was doing was legal - but it wasn't.
Here is how the DOJ press release describes the Rustamov case: We believe that most of the San Francisco office's fraud cases will fit this pattern.
"The indictment alleges that Rustamov, from October 2024 through June 2025, executed a scheme through an entity Rustamov created, Dublin Helping Hand, to submit large volumes of claims to MAOs offering Medicare Part C benefit plans. The indictment alleges the scheme sought reimbursement of more than $90 million for medical equipment that was not provided, not needed by patients, and not authorized by a medical provider. The listed patients were unaware that Rustamov and others were submitting the claims, and the referring medical provider listed on the submissions did not authorize the claims, according to the indictment."
The twist in cases like this is that the are charged as wire fraud but the wire aspect also makes it easy for the main perpetrator to vanish. Corporations can be set up by persons who are overseas. Payments are wired overseas. When a prosecution starts the main persons vanish but the local people including the doctors can easily be found. In our Lafayette case the doctor earned less than $ 10 dollars per patient chart that he reviewed but the government sought reimbursement from him of the total loss. That loss could be a thousand dollars (of equipment) provided to each patient. This dollar amount under the federal sentencing guidelines vastly increases the potential prison sentence so again, a doctor who earned 10 dollars per file can face millions of dollars in terms of the sentence guidelines which in part are "loss amount" based.
This overarching scheme type case stands in contrast to a case we tried some years ago in San Jose. In that case, U.S. v. Ganesh the charges were conspiracy to commit billing fraud and the billing frauds themselves. This case did not arise out of a task force. The case arose directly from insurance company referrals relating to what the insurers claimed were duplicate bills and billings not supported by the medical records. We expect to see less of this type of case and more of the large scheme cases referred by the task force.
Why are These Charges So Common
While STARK law and AKS law violations can be highly technical, simple fraud charges filed as wire or mail fraud are simple.
Federal prosecutors frequently "stack" mail and wire fraud charges on top of other white-collar allegations, such as healthcare fraud, securities fraud, or money laundering. The reason is simple: the "jurisdictional hook." We see cases that involve billings from doctors to Medi-Cal or Medicare which we view as simple billing disputes. We have cases where our doctors bill one code and the insurance company thinks that a lower paying code was appropriate. If the insurance company or third party administrator for Medi-Cal/Medicare claims can convince the federal prosecutors that there is fraud, a simple billing dispute becomes a federal crime simply because bills were put in the mail or submitted by the internet. To bring a case into federal court, the government only needs to prove that you used an electronic device or the mail system at some point during the alleged scheme. Even an incidental email or a single mailed invoice can be enough to trigger a federal indictment with huge federal penalties.
Think about it this way. It is almost impossible to have a billing fraud, financial scam, stock scheme without somehow using the mails or the internet. Almost any fraud crime will be mail and wire fraud as well.
Here is a current example. A Grand Jury in Montgomery, Alabama, reviewed evidence and signed off on charges against the Southern Poverty Law Center (SPLC). The Indictment included 11 counts of wire fraud. The allegations are that the SPLC funded extremist groups not just to get the inside scoop through informants but to keep the groups functioning so that the SPLC could justify its existence as a fighter of these groups. Why then is is the law center charged with the same wire fraud as a medical group which submits fake bills to be reimbursed by Medicare? The answer is that the prosecutors have to prove some type of fraud. The fraud can be accepting charitable donations with the intent of misusing those donations. The fraud can be submitting medical bills for treatment that never took place. Once the fraud is proven - the means of committing (all or even a part) fraud define the crime. It seems strange but the "wire fraud" is really just a label for conduct that is in and of itself wrongful. The federal aspect of the crime is also inherent in the charge as the use of mail (mail fraud) or wires (wire fraud) will trigger federal involvement so that the fraud is not just a state crime (committed within state borders and not involving any federal entities).
So simplified to its core, wire fraud requires the voluntary participation in a fraudulent plan, specific intent to defraud, and the use of wires (phone, email, text, internet etc). Wires and mails 99.9% of the time cross state lines. There might be some case where the electronic transmission was local and federal (across state lines) jurisdiction is not triggered but with the SPLC or billing frauds the wires are almost always the internet and this "local electronic" factor does not apply.
There is an excellent webpage produced by Allstate Insurance company which describes wire fraud. If you want a "second opinion" on this topic click here - What is Wire Fraud? Examples & How to Prevent Them | Allstate.
The connection between the use of wires and the underlying crime does not have to be very major. In a 2014 9th Circuit decision a person was guilty of mail and wire fraud based upon not his, but his co-defendants use of mails or wires. Here is what the court held:
"because Eddings knowingly participated in the Ponzi scheme, he “is liable for his co-schemers' use of the mails or wires.” United States v. Blitz, 151 F.3d 1002, 1006 (9th Cir.1998) (citation and internal quotation marks omitted). Brown's mailing was part of the scheme because it served “the purpose of lulling [the] victims.” United States v. Sampson, 371 U.S. 75, 78, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962)"
U.S. v. Brown (9th Cir. 2014) 771 F.3d 1149, 1157
Of interest also are the courts that question whether simple/run of the mill cases are improperly being turned into RICO cases. In Metaxas v. Lee, 503 F.Supp.3d 923 (2020), the Northern District of California reached similar conclusions: the plaintiff adequately pled predicate acts of mail and wire fraud and of engaging in monetary transactions in criminally derived property, but failed to establish that the defendants' conduct amounted to or posed a threat of continued criminal activity sufficient to constitute a RICO pattern Metaxas v. Lee, 503 F.Supp.3d 923 (2020). The court cautioned against expansive interpretations of civil RICO that would transform "every run-of-the-mill fraud case that belongs in state court" into a federal RICO claim Metaxas v. Lee, 503 F.Supp.3d 923 (2020). With many high profile federal crimes every legal issue will be raised and the landscape of wire fraud, mail fraud and RICO cases is ever changing.
The High Cost of a Conviction
The penalties for federal fraud are designed to be punitive. A single count can result in:
Imprisonment: Up to 20 years in federal prison. If the fraud affects a financial institution, the sentence can jump to 30 years.
Hefty Fines: Individuals can be fined up to $250,000 per count, while corporations may face fines of $500,000 or more.
Restitution: Courts typically order the defendant to pay back the full amount of any perceived losses to the victims. An open question is whether insurance can contribute to the restitution fine. Insurance companies say "no" as they do not compensate for fraud. Our office has argued that there is a gray area where some claims may be fraud but others are a simple business disagreement. We make this argument to help our clients resolve related civil lawsuits and to offset the often huge cost of restitution in criminal cases.
Remember also that in federal cases the dollar amount of the fraud is a key factor in the sentence imposed. This is a blog in and of itself but the basic rules are this:
Within the realm of federal prosecutions, specifically for white-collar offenses such as embezzlement or fraud, the financial "loss amount" serves as the primary engine behind sentencing severity. This figure dictates the specific enhancement levels applied under USSG §2B1.1, where steeper financial damages translate directly into significantly harsher prison sentences.
To determine this value, the court evaluates two distinct metrics and applies whichever is larger:
Actual Loss: The quantifiable, predictable financial damage caused by the crime.
Intended Loss: The total sum the defendant aimed to misappropriate, regardless of whether they were successful.
Protecting Your Future
Because these statutes are so broad, they are often prone to overreach. Establishing "intent to defraud" is a high bar for the government, and there are many valid defenses—such as a good faith mistake or lack of knowledge—that can be used to challenge the prosecution's narrative.
Remember that in most of the healthcare fraud cases the main defendants are never arrested. For example in June of 2025 the federal government announced a six billion dollar healthcare fraud "arrest" but the same press release said that "Twelve of these defendants have been arrested, including four defendants who were apprehended in Estonia as a result of international cooperation with Estonian law enforcement and seven defendants who were arrested at U.S. airports and the U.S. border with Mexico, cutting off their intended escape routes as they attempted to avoid capture.". This is actually rare an we suspect that the majority of the persons charged never even entered the United States. This is a case with 324 total defendants and 96 were doctors, nurse practitioners, pharmacists, and other licensed medical professionals, So from a defense perspective about 30% of those charged had minor roles compared to the out of country organizers.
You might wish to review our blog on the Corporate Practice of Medicine. Many of these organizations that are ultimately charged with crimes go over the CPOM line. This should be a warning to doctors who are hired by a locums to do this remote work. Has the corporation taken significant charge over not just administrative matters but patient care as well. While these lines are gray excessive corporate control is a red flag for potential fraud.
If you have been contacted by federal agents or have received a subpoena, do not navigate the system alone. The complexity of the Federal Sentencing Guidelines requires a sophisticated legal strategy. Contact an experienced white-collar crime attorney today to safeguard your rights and your reputation. This is particularly true if you are involved without out of the country and/or newly formed medical entities and you worked under their umbrella.
Call Now for an Initial Consultation: (925) 283-1863
